[Opinion] The G20 New Delhi Declaration | What is there in it for Crypto & Foreign Assets Holdings

Mayank Mohanka – [2023] 154 taxmann.com 174 (Article)

The 18th G20 Summit convened under India’s Presidency for the first time, with the underlying theme of ‘Vasudhaiva Kutumbakam’, has accomplished the major breakthrough on 9.9.2023, with the adoption of the G20 New Delhi Leaders’ Declaration. This Joint Declaration has been adopted after reaching the mutual consensus on several important agenda items like the Digital Public Infrastructure, Gender Equality and Women Empowerment, Countering Terrorism and Money Laundering, Green Development Pact and Financial Sector Reforms for strong, sustainable, balanced and inclusive growth. The inclusion of the African Union in the G20 group and thereby making it the G21, the Global Bio Fuel Alliance and the India Middle East Europe Economic Corridor are also the historic milestones of this G20 Summit hosted under India’s Presidency.

Usually when the leaders of G20 Nations meet and deliberate upon various path-breaking socio-economic and geo-political policy decisions, it naturally is seen as a progressive and comforting thing, but when they also discuss ‘TAX’, it also raises curiosity and anxiety as to what is in the offering. In their joint Declaration, the G20 leaders have reaffirmed their commitment to continue cooperation towards a globally fair, sustainable and modern international tax system appropriate to the needs of the 21st century.

The G20 leaders have agreed for the swift implementation of the Two-Pillar international tax package.

The Pillar One allocates certain portion of the taxing right to market jurisdictions, from the residential jurisdictions. For instance, under Pillar One, India will be able to impose certain portion of income tax on the sales generated in Indian marketplace by the giant e-commerce digital platforms like Amazon, Google, Facebook, ChatGPT etc, which otherwise claim non applicability of any Indian tax liability in the absence of any Permanent Establishment (PE) in India. However, unilateral measures like equalisation levy will require withdrawal after implementation of Pillar One.

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